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New CPI report will outline the scale of US’ inflation problems

The consumer price index (CPI) report for June is due out on Wednesday and expectations are that it will exceed the 8.6 percent registered in May. Hopes had been that inflation had peaked but on top of the stronger than expected jobs report last week the Federal Reserve may be inclined to double down on its aggressive rate hike strategy, potentially implementing another three-quarters of a percentage increase when policy makers meet at the end of the month.

Inflation and fears of looming recessions in major economies around the world have investors seeking out safe investments to ride out the storm. The knock-on effect is that investing in greenbacks is even more attractive causing the US dollar to surge against other world currencies. The pound recently hit a two-year low against the US dollar and the euro almost fell to parity with the greenback for the first time in twenty years.

Expectations are that the European common currency will fall behind the US dollar in August. That’s good news for those who plan to travel across the pond this summer, if they can find a reasonably priced flight. The price of airfare has jumped a whopping 38 percent from last year on the back of strong demand and high crude prices.